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Reasons to Consider
4 Flexible
Many ETFs track popular global indices, which clients
will know and recognise. Index tracking itself is a ETFs are very flexible; they can be bought and sold
widely accepted investment approach, which has been intraday on exchange in the same way as a share. This
developed over the past 25 years. not only means that their prices can be constantly
monitored, but it also allows for ETF investments to be
As such, for clients who may otherwise choose to
bought and sold in a timely fashion, to reflect changing
invest in stock markets via other investment vehicles
client investment needs.
(such as unit trusts/OEICs), ETFs can offer a more
straightforward way to invest, especially as they can be One key advantage of ETFs is that their diverse nature
bought and sold continuously throughout the day on the - in particular the various countries/regions and sectors
stock exchange, like a share. where they can be invested - means that they can
be easily used as portfolio building blocks; either to
7 A tax-efficient product
1 3
Market Access Spotlight on Performance
HSBC offers a wide range of ETFs across both HSBC compares favourably to its peers in terms of
developed and emerging markets, providing ample tracking difference and tracking error (two common
opportunities for portfolio diversification. Overall, indicators of ETF performance) across our range of
HSBCs range of equity ETFs has a slight bias towards equity ETFs.
Global Emerging Markets (15 out of 27 funds).
HSBCs robust quantitative portfolio management and
Emerging markets are accounting for a rising share
trading processes aim to ensure that HSBC ETFs are
of international equity markets and consequently are
able to track their benchmark indices closely. Moreover,
increasingly playing a growing role in asset allocation
our overall investment approach remains conservative.
within global investment portfolios.
We believe in strong levels of risk management and
HSBC has a long track record in emerging market governance for our range of ETF products, aiming to
investment and we can subsequently offer direct deliver minimum tracking difference and tracking error
market access on many local stock exchanges. We at a competitive price to our clients.
were the first provider in Europe to offer investors a
4
physically replicated Russian ETF investing in local Proven Track Record
Russian stocks. HSBCs range of ETFs is managed by HSBC Global
Moreover, we believe, the tracking error and tracking Asset Management, a leading global investment
difference across our range of Emerging markets ETFs manager with a long track record of providing sound
is very competitive, compared to both physical and investment solutions to a wide range of investors
synthetic Funds. around the world. We have been managing passive
investments around the world for over 25 years and
HSBC only offers physically replicated ETFs. We believe HSBC started offering ETFs in Europe in 2009. We
that the physically replicated approach allows for greater currently offer 27 ETFs in Europe - that cover the
transparency within the product. main developed and emerging equity markets - with
USD9.9bn of assets under management as at the end
Our investment approach is primarily based on
of February 2016.
replication (i.e. owning all of the shares in the
underlying index) for 23 out of our 27 equity funds, HSBCs established position in global emerging markets
with the remaining 4 funds using a technique known as means that we are well positioned to offer ETFs based
optimisation (i.e. where we own a proportion of shares in these fast-growing areas of the world.
in the underlying index, as it is not cost-effective or HSBC ETFs are all UCITS IV compliant, ISA and SIPP
feasible to buy all of the shares). eligible and have UK Reporting Fund status.
There is an alternative ETF investment approach, known HSBCs ETFs carry no entry or exit fees. However, as
as synthetic (or swap-based) replication. These ETFs ETFs trade on stock exchanges, they are subject to bid-
use swaps and other derivative products to obtain offer spreads and broker commissions.
market access. However, we believe that the risks
associated with such ETFs the most important of
which is counterparty risk make them a less attractive
investment option.
Currency risk: For further information on HSBCs range of ETFs, including up-to-
date performance information, costs and current holdings, please
Where overseas investments are held, the rate of currency
visit www.etf.hsbc.com.
exchange may cause the value of such investments to go down
as well as up.
Russian risk:
There are significant risks inherent in investing in Russia, which
could affect the value of investment. These include a lack of
clarity in laws and regulations in the following areas: investor
protection, banks and other financial services, the Russian
economic system, taxation, transaction settlement and fiduciary
duty and responsibilities of company management.
Performance risk:
Past performance is not an indication of future returns.
Important Information
This document is intended for professional clients only and should not be distributed to or relied upon by retail clients. The material
contained herein is for information purposes only and does not constitute investment advice or a recommendation to any reader of this material
to buy or sell investments. Care has been taken to ensure the accuracy of this document, but HSBC Global Asset Management (UK) Limited
accepts no responsibility for any errors or omissions contained therein. Any views expressed were held at the time of preparation and are subject
to change without notice.
HSBC ETFs are sub-funds of HSBC ETFs plc, an investment company with variable capital and segregated liability between sub-funds,
incorporated in Ireland as a public limited company, and authorised by the Central Bank of Ireland. The company is constituted as an umbrella
fund, with segregated liability between sub-funds. Shares purchased on the secondary market cannot usually be sold directly back to the
Company. Investors must buy and sell shares on the secondary market with the assistance of an intermediary (e.g. a stockbroker) and
may incur fees for doing so. In addition, investors may pay more than the current Net Asset Value per share when buying shares and may
receive less than the current Net Asset Value per Share when selling them. UK-based investors in HSBC ETFs plc are advised that they may
not be afforded some of the protections conveyed by the Financial Services and Markets Act (2000), (the Act). The company is recognised in the
United Kingdom by the Financial Conduct Authority under section 264 of the Act.
All applications are made on the basis of the current HSBC ETFs plc Prospectus, relevant Key Investor Information Document (KIID),
Supplementary Information Document (SID) and Fund supplement, and most recent annual and semi-annual reports, which can be obtained upon
request free of charge from HSBC Global Asset Management (UK) Limited, 8 Canada Square, Canary Wharf, London, E14 5HQ. UK, or from a
stockbroker or financial adviser. Investors and potential investors should read and note the risk warnings in the prospectus, relevant KIID,
SID and Fund supplement. The shares in HSBC ETFs plc have not been and will not be offered for sale or sold in the United States of America,
its territories or possessions and all areas subject to its jurisdiction, or to United States persons. Affiliated companies of HSBC Global Asset
Management (UK) Limited may make markets in HSBC ETFs plc.
The information in this document is based on HSBCs interpretation of current legislation and HM Revenue & Customs practice. While we believe
that this interpretation is correct, we cannot guarantee it. Legislation and tax practice may change in the future. Tax treatment is based upon
individual client circumstances.
HSBC Global Asset Management (UK) Limited provides information to institutions, professional advisers and their clients on the investment
products and services of the HSBC Group. This document is approved for issue in the UK by HSBC Global Asset Management (UK) Limited who
are authorised and regulated by the Financial Conduct Authority. Copyright HSBC Global Asset Management (UK) Limited 2016. All rights reserved.